Thursday, July 9, 2009

Understanding The Lifetime Value of a Client

There’s an old story of two grocers. They were sitting on a park bench. One says to the other: “You know, I’ve just gone over the figures and I divided the week’s revenues by the number of transactions and I’ve worked out the average customer is worth $72.90 to me. Have you ever worked out what a customer is worth to you Bob?”

Bob says “Sure Bill, about $75,000.”

What’s the difference? Bill was thinking in terms of one sale. Bob, on the other hand, knows about the lifetime value of a customer.

He figures it like this:

$72.90 x 52 weeks x 20 years = $75,816

What’s the lifetime value of your clients? If you don’t know, you could be missing out on thousands of dollars of opportunity.

The point is, it’s not enough to get a client in the door, sell to them and then say “Thanks for dropping by. Do come again sometime.” You have to develop a system to keep them coming back to you instead of going to your competitors. And you’re about to learn how. You’ll learn how to get them to spend more when they do, and how to encourage them to come back more often.

Did you know that there is but one formula for practice income growth? There are only three ways to grow any business:

• Increase the number of clients.
• Increase how much they spend or the profit per transaction.
• Increase how often they come back.

Here’s the equation: C x Act x F = I

Where: C = Number of clients
Act = Average client transaction
F = Frequency of transaction
I = Income

If you increase each one by a mere 10% you’ve added 33% to your income.

Add 25% to each and you’ve doubled your income. Double each of the 3 areas and you’ve increased your income by 800%! Notice the multiplying effect?

Think about how you can use this in your business.

Wednesday, July 1, 2009

12 Secrets To Success

I am often asked what is the difference between successful people and those that do not experience success. There are many quotes and books on this subject. Some of my favorite thoughts are:
  • Successful people are prepared to do the things that others aren't willing to do.
  • Successful people set goals.
  • Successful people focus on daily improvement (CANI - constant and never-ending improvement.)
  • Successful people have faith, and so on.
This is a huge subject, but I thought I would share with you my thoughts in the form of a list of 12 keys. Enjoy, and may you find greater success in your life.

12 Secrets To Success

  1. MWPs (Millionaires with Purpose) take risks and understand that high risk and massive education = low risk!
  2. MWPs focus on ONE thing and do it well.
  3. MWPs do not over estimate the short term or under-estimate the long term.
  4. MWPs NEVER give up, they just change tact.
  5. MWPs do the numbers then back themselves to the hilt.
  6. MWPs surround themselves with like-minded people.
  7. MWPs make decisions quickly and confidently once they have all the facts.
  8. MWPs make everything urgent.
  9. MWPs take time out to formulate their own thinking about critical issues relating to their life.
  10. MWPs say "How can I?" instead of "I can't."
  11. MWPs do whatever it takes to change their lives.
  12. MWPs always take personal responsibility and never place blame. If one person can do it then they can do it.

Live with Passion,
Jesus Balderas "The Coach"